DOF SUBSEA Sub/IR/2015/DOF Subsea Financial Repor… · FINANCIAL REPORT 3RD QUARTER 2015 NOK million 3Q 2015 3Q 2014 Change % Operating income 1 904 1 815 5% Operating expenses -1

DOF SUBSEA financial report

BUILDING OUR SUBSEA FUTURE

Q3 2015

DOF Subsea ASThormøhlens gate 53 C5006 BergenNORWAYwww.dofsubsea.com

INDEX

Financial Report 3RD quarter 2015 . . . . . . . . . . . . . . . . . .4

Financial statements 3rd quarter 2015 . . . . . . . . . . . . . . .8

Consolidated statement of comprehensive income . . . . . . . . . . . 8

Consolidated statement of financial position . . . . . . . . . . . . . . . . . . 9

Consolidated statement of financial position . . . . . . . . . . . . . . . . 10

Consolidated statement of cash flows. . . . . . . . . . . . . . . . . . . . . . . . 11

Consolidated statement of changes in equity . . . . . . . . . . . . . . . . 12

Notes to the financial statements . . . . . . . . . . . . . . . . . . 14

Note 1 Management reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Note 2 Segment information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Note 3 Financial income and expenses . . . . . . . . . . . . . . . . . . . . 16

Note 4 Tangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Note 5 Interest-bearing debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Note 6 Financial instruments and hedging activities . . . . . 18

Note 7 Transactions with related parties . . . . . . . . . . . . . . . . . . 19

Note 8 Investments in associates and joint ventures. . . . . 19

Note 9 Events after the consolidated statement of financial position date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Note 10 Shareholder information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Note 11 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Supplemental information . . . . . . . . . . . . . . . . . . . . . . . . . 22

Condensed statement of comprehensive income 5 last quarters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Condensed statement of financial position 5 last quarters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

DOF Subsea vessels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Financial Report Q3 2015 | DOF SUBSEA

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HeadlinesIn the 3rd quarter of 2015, DOF Subsea had an oper-ating revenue of NOK 1 904 million (vs. NOK 1 815 million in 3rd quarter 2014) with an EBITDA of NOK 452 million (NOK 496 million). The EBIT was NOK 273 million (NOK 343 million) after depreciation and write-down of NOK 179 million (NOK 153 million).

For the first 9 months of 2015, DOF Subsea AS had an operating income of NOK 5 326 million (vs. NOK 5 143 million for first 9 months of 2014) with an EBITDA of NOK 1 543 million (NOK 1 669 million). The EBIT was NOK 1 039 million (NOK 1 253 million) after depreciation and write-down of NOK 503 million (NOK 417 million).

During the 3rd quarter, the Group was awarded several contracts with a total value of NOK 4 500 million. The main contracts awarded were: extension of Geoholm with Petrobras, extension of Skandi Acergy and Skandi Skansen with Subsea 7, an IMR contract with Freeport McMoran and a 10 year IMR contract with Husky Energy. The vessel utilization was 88 %, where the project vessel utilization was 76 % and the TC vessel utilization was 97 %.

Operational events 3rd quarterAs of 30th September 2015, the Group’s fleet comprised 22 owned vessels, 5 chartered-in vessels, 4 vessels under construction, a ROV fleet of 58 units and 9 ROVs on order.

During the 3rd quarter 2015, the Group was conducting IMR work for Shell Philippines, Chevron Australia, and diving work for Noumea in New Caledonian. In the North Sea, the Group has been doing Survey and Light construction work for Shell, Statoil and Technip, tow-out and mooring of the Goliat FPSO for Eni, Survey and Positioning work for Statoil and HMC. In the Gulf of Mexico, the Group has conducted IMR work for Freeport McMoran, Chevron, and Survey and Positioning work for Chevron and HMC. In Brazil, the Group has been engaged in work for BW Offshore and Chevron in addition to ROV, survey and installation work for Petrobras.

During the 3rd quarter 2015, the utilization of the Group’s

vessels was 88 %. The utilization for the project vessels during the 3rd quarter 2015 was 76 % and for the TC vessel 97 %.The main reasons for the low utilization of the project vessels were idle time between projects on the vessels Chloe Candies, Ross Candies, Skandi Protector and Skandi Inspector. On Ross Candies, a new ROV system was mobilized reducing the utilization.

All utilization of vessel numbers are based on actual available days not excluding days at yard for dry-docking, repair / upgrading, transit or idle time between projects.

Consolidated statement of comprehensive income and consolidated statement of financial positionFor the 3rd quarter 2015, the Group achieved an operating income of NOK 1 904 million compared to an operating income of NOK 1 815 million for the 3rd quarter 2014. Operating profit before depreciation (EBITDA) was NOK 452 million (NOK 496 million) and the operating profit after depreciation (EBIT) was NOK 273 million (NOK 343 million). Depreciation and write-down amounted to NOK 179 million (NOK 153 million).

Net financial loss was NOK 605 million (Net financial loss NOK 228 million), whereas NOK 450 million (NOK 94 million) of the net financial loss was unrealized currency loss and unrealized loss on financial instruments. The loss before tax was NOK 332 million (positive NOK 115 million) and the loss for the period was NOK 312 million compared with NOK 91 million in profit for the period 2014.

The operating income for the first 9 months of 2015 was NOK 5 326 million compared to an operating income of NOK 5 143 million for 2014. Operating profit before depreciation (EBITDA) was NOK 1 543 million after profit from sales of non-current assets of NOK 205 million (NOK 1 669 million after profit from sales of non-current assets of NOK 204 million). The EBIT was NOK 1 039 million (NOK 1 253 million) after depreciation and write-downs of NOK 503 million (NOK 417 million). Net financial loss amounted to

FINANCIAL REPORT 3RD QUARTER 2015

NOK million 3Q 2015 3Q 2014 Change %

Operating income 1 904 1 815 5%

Operating expenses -1 452 -1 319 10%

EBITDA 452 498 -9%

EBIT 273 344 -21%

Utilization 3Q 2015 2Q 2015 1Q 2015 4Q 2014 3Q 2014

Project vessels 76% 78 % 53 % 67 % 86 %

Time charter vessels 97% 98 % 98 % 97 % 97 %

Fleet 88% 90 % 81 % 86 % 93 %

Key figures (NOK million) 3Q 2015 3Q 2014 YTD 2015 YTD 2014

Operating income 1 904 1 815 5 326 5 143

EBITDA 452 496 1 543 1 670

EBIT 273 343 1 039 1 253

Net interest-bearing debt 9 595 9 248 9 596 9 248

EBITDA proportional method 553 552 1 773 1 799

| Financial Report Q3 2015DOF SUBSEA

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NOK 913 million (NOK 543 million) of which NOK 510 million was an unrealized loss on financial instruments (NOK 27 million). The profit before tax was NOK 126 million (NOK 710 million) and the profit for the period was NOK 123 million (NOK 672 million).

The Group’s total assets were NOK 18 553 million (NOK 17 776 million) where non-current assets amounted to NOK 15 086 million (NOK 14 913 million), including NOK 810 million (NOK 641 million) in intangible assets. Current assets were NOK 3 467 million (NOK 2 863 million) of which NOK 1 487 million (NOK 986 million) were cash and cash equivalents. This amount includes restricted cash of NOK 392 million (NOK 483 million).

The total equity was NOK 5 641 million (NOK 5 938 million), including non-controlling interests of NOK 261 million (NOK 224 million). Non-current liabilities, including non-current provisions for commitments, were NOK 8 592 million (NOK 8 391 million). Current liabilities were NOK 4 320 million (NOK 3 447 million) of which NOK 2 909 million (NOK 2 313 million) were short-term portion of debt including short -term portion of bond loan. The net interest-bearing debt (NIBD) was NOK 9 595 million (NOK 9 248 million). By end of 3rd quarter the book equity ratio was 30.4 %, with value adjusted equity ratio of 39.1%. The value-adjusted equity ratio is calculated by adjusting the book equity and total asset by excess values on all owned vessels. The book and value adjusted equity ratio is lower compared to the previous quarter mainly due to debt denominated in USD (unrealized currency loss) and payment of dividend.

Cash and cash equivalent has increased due to refinancing of vessels, repayment of debt and instalments. Net interest-bearing debt was NOK 9 596 million representing 52 % of total assets and 46 % of value adjusted assets.

Cash flow from operating activities YTD was NOK 761 million (NOK 544 million). Cash flow from investing activities during the year was NOK - 1 478 million (NOK 41 million) of which NOK 2 578 million is from investment in assets that increase or will increase capacity and NOK 976 million is from sales of vessels that reduce capacity for the Group. Cash flow from financing activities was NOK - 29 million (NOK - 1 356 million). At the end of the 3rd quarter the Group’s cash and cash equivalents was NOK 1 487 million (NOK 986 million).

Debt, financing and liquidityDuring the quarter the Group has financed Skandi Acergy with international banks at terms standard for DOF Subsea and paid ordinary installments on outstanding debt, in addition the Group has bought bonds in DOFSUB05 and DOFSUB06 for a total amount of NOK 448 million. For the remaining new building program owned 50/50 with Technip the financing is in progress.

The Group’s short portion of debt as at 30th September 2015 totals NOK 2 909 million, and includes balloons, bonds (DOFSUB05 and DOFSUB06, credit facilities and ordinary installments. The Group is in progress to refinance balloons and loans that mature over the next 12 months

Financial riskThe Group’s operating income is in NOK, USD, AUD, GBP and BRL while the Group’s loans are distributed between NOK and USD. This exposes the Group to the risk of exchange rate fluctuations. The Group has an active exchange rate policy, and uses derivatives to hedge the exchange rate exposure.

The Group is exposed to fluctuations in interest rates. Part of the Group’s loans has fixed interest rates, reducing the exposure. The Group has an active interest rate policy, and uses derivatives to hedge the interest rate exposure.

ShareholdersThe shares in DOF Subsea AS are 100 % owned by DOF Subsea Holding 2 AS. The number of outstanding shares is 119,733,714, with a book equity of NOK 47.11 per share. The value-adjusted equity per share as per 30th September 2015 was NOK 69.24

EmployeesAs per 30th September 2015, the number of employees in the DOF Subsea Group was 1 630 persons. The numbers do not include marine employees that are employed in DOF Management and Norskan.

NOK million 30 .09 .2015 30 .09 .2014 Change %

Tangible assets 13 295 12 946 3%

Cash and cash equivalents 1 487 986 51%

NIBD 9 595 9 248 4%

Total equity 5 641 5 938 -5%


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The FleetAs per 30th September 2015, the Group fleet comprised 22 owned vessels, 5 chartered-in vessels and 4 vessels under construction in a joint venture with Technip. Of the vessels under construction, the delivery of the first vessel is expected in June 2016.

Contract Coverage*

* Contract coverage excludes master service agreements (MSAs) within the

subsea project segment. Under the MSAs only confirmed POs are accounted for.

Events after the consolidated statement of financial position dateIn October, Skandi Africa commenced on a 5 year time charter contract with Technip.

Forward looking statementThe Board of Directors are pleased with the financial numbers during the 3rd quarter and year to date. In order to adjust the Group’s capacity to the challenging market, needed cost cutting measures have been implemented during 2015. The organization has been reduced by approx. 200 employees since the start of the year, vessels have been re-allocated between regions in order to secure utilization and chartered-in vessels from 3rd parties have been redelivered. In addition, the Group has secured contract awards of NOK 4.5 billion during 3rd quarter.

The Board of Directors expect the challenging market to continue into 2016, with an oil price of USD 50 per barrel, the current cost focus in the oil industry and increased supply of vessels. The cost cutting measures taken so far has proved to be needed, and the Board of Directors has a strong focus on continuously adjusting the Group’s capacity and risk exposure to the market going forward.

The contract backlog including options amounts to approxi-mately NOK 40 billion as at 30th of September 2015, equivalent to about 6 years turnover, and a large portion of the fleet is fixed on long-term contracts with solid counterparts. However, the Group is exposed to the short-term market fluctuations on the subsea project vessels. On these vessels, management is working to increase the backlog.

Bergen, 12th November 2015The Board of DOF Subsea AS

Contact information:Mons S. Aase, CEO +47 916 61 012Marianne Møgster +47 993 06 916

DOF Subsea ASThormølens gate 53 C5006 Bergen www.dofsubsea.com


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8

Amounts in NOK million

FINANCIAL STATEMENTS 3RD QUARTER 2015

Consolidated statement of comprehensive income

Note 3Q 2015 3Q 2014 YTD 2015 YTD 2014 2014

Operating income 1, 2 1 904 1 815 5 326 5 143 7 073

Payroll expenses -510 -497 -1 576 -1 361 -1 961

Other operating expenses -915 -844 -2 472 -2 404 -3 308

Share of net income of associates and joint ventures 1, 8 -27 22 59 88 125

Profit from sale of non-current assets 1 - 205 204 465

Total operating expenses -1 452 -1 319 -3 783 -3 473 -4 679

Operating profit before depreciation (EBITDA) 1, 2 452 496 1 543 1 670 2 394

Depreciation and write-downs 4 -179 -153 -503 -417 -577

Operating profit (EBIT) 273 343 1 039 1 253 1 817

Financial income 3 8 9 29 38 49

Financial expenses 3 -145 -168 -439 -522 -691

Realized gain / loss on financial instruments 3 -17 26 7 -32 -90

Unrealized gain / loss on financial instruments 3 -450 -94 -510 -27 -375

Net financial income / loss -605 -228 -913 -543 -1 108

Profit / loss before tax -332 115 126 710 709

Tax expense 20 -24 -3 -39 25

Profit / loss for the period -312 91 123 672 734

Other comprehensive income

Items that may be subsequently reclassified to profit / loss

Currency translation difference (CTA) -35 38 -37 119 165

Cash flow hedges 10 4 20 17 18

Share of other comprehensive income of associates and joint ventures 8 -202 -156 -334 -84 -22

Items that will not be subsequently reclassified to profit / loss

Defined benefit plan actuarial gains / losses - - - 3 3

Other comprehensive income / loss net of tax -228 -114 -352 54 164

Total comprehensive income for the period -540 -23 -229 725 898

Total comprehensive income attributable to:

Non-controlling interests 7 1 14 10 50

Owners of the parents -547 -24 -243 715 848


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Consolidated statement of financial position

Assets Note 30 .09 .2015 30 .09 .2014 31 .12 .2014

Deferred tax asset 319 156 269

Goodwill 490 484 477

Intangible assets 810 641 746

Vessels 4 9 899 11 234 10 477

ROVs 4 930 1 020 991

Machinery and other equipment 4 454 468 421

Newbuilds 4 2 013 225 255

Tangible assets 13 295 12 946 12 143

Investment in associates and joint ventures 1, 8 275 926 971

Other non-current receivables 6 706 400 478

Financial assets 981 1 326 1 448

Non-current assets 15 086 14 913 14 336

Trade receivables 1 451 1 434 1 558

Other current receivables 6 528 443 406

Total receivables 1 980 1 877 1 964

Restricted cash 392 483 485

Unrestricted cash and cash equivalents 1 095 503 1 635

Cash and cash equivalents 5 1 487 986 2 120

Current assets 3 467 2 863 4 084

Total assets 18 553 17 776 18 420


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Equity and liabilities Note 30 .09 .2015 30 .09 .2014 31 .12 .2014

Paid in equity 10 3 844 4 069 4 069

Other equity 1 535 1 645 1 778

Non-controlling interests 261 224 265

Total equity 5 641 5 938 6 112

Deferred taxes 7 1 11

Pensions 12 12 12

Other provisions and commitments 2 - -

Non-current provisions for commitments 21 13 22

Bond loans 5 1 292 2 739 2 040

Debt to credit institutions 5 7 076 5 354 5 593

Financial non-current derivatives 6 176 257 290

Other non-current liabilities 28 28 27

Non-current liabilities 8 572 8 378 7 950

Short portion of debt 5 2 909 2 312 2 974

Trade payables 873 747 797

Other current liabilities 6 537 387 565

Current liabilities 4 320 3 447 4 336

Total liabilities 12 912 11 838 12 308

Total equity and liabilities 18 553 17 776 18 420



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Consolidated statement of cash flows

Note 3Q 2015 3Q 2014 YTD 2015 YTD 2014 2014

Operating profit (EBIT) 273 343 1 039 1 253 1 817

Depreciation and write-downs 4 179 153 503 417 577

Profit from sale of non-current assets -1 - -205 -204 -465

Share of net income of associates and joint ventures 1, 8 27 -22 -59 -88 -125

Change in trade receivables -123 -42 106 -161 -285

Change in trade payables 98 -176 76 -41 9

Changes in other working capital 40 27 -67 -159 -76

Exchange rate effect on operating activities -49 3 -91 61 24

Cash flow from operating activities 444 286 1 303 1 078 1 476

Interest received 7 13 24 37 42

Interest paid -126 -180 -433 -538 -693

Tax paid -24 -10 -132 -33 -44

Net cash flow from operating activities 301 109 761 544 781

Sale of tangible assets 1 - 976 930 2 074

Purchase of tangible assets 4 -106 -217 -2 578 -729 -897

Sale of shares - - 417 - -

Dividends received - - 3 - -

Changes in other receivables and liabilities -62 -87 -298 -160 -167

Cash flow from investing activities -167 -304 -1 478 41 1 011

Proceeds of interest-bearing debt 825 135 2 844 868 2 068

Installments on interest-bearing debt -667 -290 -2 630 -2 221 -3 553

Dividend / Group contributions paid -225 - -225 - -

Payments to non-controlling interests - - -18 -3 -3

Cash flow from financing activities -67 -155 -29 -1 356 -1 488

Net change in cash and cash equivalents 67 -350 -746 -771 304

Cash and cash equivalents at the beginning of period 1 416 1 326 2 119 1 752 1 752

Exchange rate effect on cash and cash equivalents 3 11 114 6 64

Cash and cash equivalents at the end of the period 1 487 986 1 487 986 2 120

From the first quarter 2015 the Group has changed the presentation of cash flows. Comparative figures for previous periods have been restated accordingly.


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Consolidated statement of changes in equity

Share

capital

Share

premium

Other paid-in capital

Retained earnings

Currency translation

differences

Cash flow

hedges

Total

Non- controlling

interests

Total

equity

Equity at 01 .01 .2015 1 197 741 2 130 1 793 8 -23 5 847 265 6 112

Profit / loss for the period - - - 109 - - 109 14 123

Other comprehensive income for the period - - - -334 -37 20 -352 - -352

Total comprehensive income for the period - - - -225 -37 20 -243 14 -229

Dividends -225 -225 -225

Changes in non-controlling interests - - - - - - - -18 -18

Equity at 30 .09 .2015 1 197 516 2 130 1 568 -29 -4 5 379 261 5 641

Equity at 01 .01 .2014 1 197 741 2 130 1 126 -157 -40 4 998 218 5 216

Profit / loss for the period - - - 661 - - 661 10 672

Other comprehensive income for the period - - - -81 119 17 54 - 54

Total comprehensive income for the period - - - 580 119 17 715 10 725

Changes in non-controlling interests - - - - - - - -3 -3

Equity at 30 .09 .2014 1 197 741 2 130 1 706 -38 -23 5 714 224 5 938

Cash flow hedges and change in defined benefit actuarial gains / losses are presented after tax. Tax rate used is 27-34 %.


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NOTES TO THE FINANCIAL STATEMENTS

Note 1 Management reporting

Consolidated statement of comprehensive income

YTD 2015Consistent with

management reportingIFRS 11

impact YTD 2015

Total operating income 5 609 -283 5 326

Total operating expenses -3 828 -14 -3 843

Share of net income of associates and joint ventures -8 67 59

Operating profit before depreciation (EBITDA) 1 773 -231 1 543

Operating profit (EBIT) 1 240 -201 1 039

Net financial income / loss - 1 092 179 -913

Profit / loss for the period 123 -0 123


30 .09 .2015Consistent with


impact 30 .09 .2015

Intangible assets 988 -179 810

Tangible assets 14 972 -1 677 13 295

Financial assets 487 495 981

Non-current assets 16 447 -1 361 15 086

Current assets 3 674 -207 3 467

Total assets 20 121 -1 568 18 553


30 .09 .2015Consistent with


impact 30 .09 .2015

Total equity 5 641 -0 5 641

Non-current provisions for commitments 29 -8 21

Non-current liabilities 9 959 -1 388 8 572

Current liabilities 4 492 -172 4 320

Total liabilities 14 480 -1 568 12 912

Total equity and liabilities 20 121 -1 568 18 553

The table below shows the effect of application of IFRS 11 on the main items in the consolidated statement of comprehensive income and the consolidated statement of financial position. The Group uses the proportionate consolidation method when accounting for joint ventures in management reporting.


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Note 2 Segment information

The Group applies the equity method to account for joint ventures, as required by IFRS 11. The segment reporting below is presented according to internal management reporting, based on the proportionate consolidation method of accounting for joint ventures. The bridge between management reporting and the figures reported in the financial statements is presented below.

Presentation of segments includes information that is reported to the chief operating decision-makers on a regular basis. Corporate expenses and similar are allocated to the segments proportionately based on the estimated split of services delivered to each segment.

From the first quarter 2015 the calculation method for allocation of corporate expenses and similar expenses was adjusted. Third quarter 2014 figures were restated accordingly.

Figures reported in the chartering of vessels segment are covering all vessels on long-term charters to external customers, and includes sales gains from the sale of vessels (Skandi Aker in Q1 and Skandi Arctic in Q2). The subsea projects segment is covering the Group’s integrated service activities in survey, subsea construction and inspection, maintenance and repair services (IMR).

Operating income consistent with management reporting

3Q 2015

3Q 2014

YTD 2015

YTD 2014

2014

Chartering of vessels 607 589 1 812 1 659 2 044

Subsea projects 1 384 1 315 3 797 3 739 5 378

Total consistent with management reporting 1 992 1 904 5 609 5 398 7 422

Effect of IFRS 11 -87 -89 -283 -256 -349

Total 1 904 1 815 5 326 5 143 7 073

EBITDA consistent with management reporting

Chartering of vessels 384 384 1 376 1 289 1 895

Subsea projects 169 168 396 510 668

Total consistent with management reporting 553 552 1 773 1 799 2 563

Effect of IFRS 11 -101 -57 -231 -130 -169

Total 452 494 1 543 1 670 2 394


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Note 3 Financial income and expenses

Note 4 Tangible assets

3Q 2015 3Q 2014 YTD 2015 YTD 2014 2014

Interest income 8 7 26 30 38

Other financial income 0 2 3 8 10

Financial income 8 9 29 38 49

Interest expenses -160 -172 -468 -523 -695

Capitalization of interest 13 5 29 5 8

Other financial expenses 2 -1 0 -4 -4

Financial expenses -145 -168 -439 -522 -691

Net gain / loss on non-current debt 5 1 111 -45 -11

Net gain / loss on operational capital 5 20 119 9 96

Net gain / loss on financial derivatives -27 5 -224 3 -175

Net realized gain / loss on financial instruments -17 26 7 -32 -90

Net unrealized gain / loss on non-current debt -330 -92 -555 -32 -227

Net unrealized gain / loss on operational capital -5 11 -39 13 25

Net unrealized gain / loss on financial derivatives -115 -13 84 -8 -174

Unrealized gain / loss on financial instruments -450 -94 -510 -27 -375

Net financial income / loss -605 -228 -913 -543 -1 108

30 .09 .2015

Vessels & periodic maintenance

ROVs

Machinery & other equipment

Newbuilds

Total

Net booked value 01 .01 . 10 476 991 421 255 12 143

Additions 611 128 80 1 759 2 578

Disposals -753 -1 -17 - -771

Reclassification 32 -48 16 -1 -

Depreciation -249 -132 -61 - -441

Impairment -62 - -1 - -63

Currency translation differences -157 -8 15 - -150

Net booked value 30 .09 . 9 899 930 454 2 013 13 295

30 .09 .2014

Net booked value 01 .01 . 12 025 801 425 86 13 337

Additions 174 304 113 138 729

Disposals -657 -46 -24 - -728

Reclassification -41 47 -6 - 0

Depreciation -285 -87 -47 - -417

Currency translation differences 14 3 6 - 24

Net booked value 30 .09 . 11 234 1 020 468 225 12 946


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Note 5 Interest-bearing debt

30 .09 .2015 30 .09 .2014 31 .12 .2014

Non-current interest-bearing debt

Bond loan floating rate 1 300 2 750 2 040

Debt to credit institutions 7 111 5 381 5 593

Total non-current interest bearing debt 8 411 8 131 7 633

Current interest-bearing debt

Bond loan, floating rate 926 - 700

Debt to credit institutions 1 844 2 193 2 144

Total current interest-bearing debt 2 770 2 193 2 844

Total non-current and current interest-bearing debt 11 181 10 324 10 477

Net interest-bearing debt

Cash and cash equivalent 1 487 986 2 120

Other interest-bearing assets - non-current 99 90 101

Total net interest-bearing debt 9 595 9 248 8 256

Share of debt secured by fixed interest rate30 .09 .2015 Fixed rate Floating rate Total

NOK

Debt to credit institutions 88% 12% 100%

Bond loan 0% 100% 100%

Total NOK 40% 60% 100%

USD

Debt to credit institutions 95% 5% 100%

Total USD 95% 5% 100%

Total debt 73% 27% 100%

Non-current interest-bearing debt in the consolidated statement of financial position includes amortized cost.Amortized costs and accrued interest expenses are excluded in the figures below.

A long-term loan has been provided by Eksportfinans and is invested as a restricted deposit. The repayment terms on the loan from Eksportfinans are equivalent with the reduction on the deposit. The loan will be fully repaid in 2020. The cash deposit is included in restricted deposits.

Debt repayment profile

Remaining balance 2015

2016

2017

2018

2019

Thereafter

Total

Bond loan 505 421 - 1 300 - - 2 226

Debt to credit institutions 532 1 822 821 820 1 971 2 989 8 955

Total repayment 1 037 2 243 821 2 120 1 971 2 989 11 181


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Note 5 Interest-bearing debt (continued from previous page)

Note 6 Financial instruments and hedging activities

Financial covenantsThe Group’s long-term financing agreements include the following covenants: - The Group shall have available cash of at least NOK 500 million at all times - The Group shall have value adjusted equity to value adjusted assets varying from 25-30% - The Group shall have equity of at least NOK 3 000 million at all times - The Group shall have positive working capital at all times, excl. short portion of debt - The fair value of the Group’s vessels shall always be at least 100-130% of the outstanding amount. In addition to the above mentioned financial covenants, the loan agreements are also subject to the following covenants: - The Group’s assets shall be fully insured - There shall not be any change to classification, management or ownership of the ships without the prior written approval of the lenders- DOF ASA shall be the principal shareholder in DOF Subsea AS, and own a minimum of 50% of the shares- DOF Subsea AS shall not merge, demerge or divest activities without the prior written approval of the lenders - DOF Subsea AS shall report financial information to the banks and Oslo Stock Exchange on a regular basis - The Group’s ships shall be operated in accordance with current laws and regulations.

The Group is in compliance with all covenants.

Assets

30 .09 .2015

Liabilities

Assets

30 .09 .2014

Liabilities

Non-current and current portion

Interest rate swaps - cash flow hedges 12 227 22 241

Interest rate swaps - cash flow hedges under hedge accounting - 4 - 15

Foreign exchange contracts cash flow hedges 13 120 - 40

Total non-current and current 25 351 22 296

Non-current portion

Interest rate swaps - cash flow hedges - 154 22 239

Interest rate swaps - cash flow hedges under hedge accounting - - - 10

Foreign exchange contracts cash flow hedges 8 22 - -

Total non-current portion 8 176 22 249

Total current portion 18 175 - 47

Committed Received

30 .09 .2015

Amount

Committed Received

30 .09 .2014

Amount

Instrument

Foreign exchange contracts, buy NOK NOK 1 911 NOK 2 020


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Note 9 Events after the consolidated statement of financial position date

Note 7 Transactions with related parties

Description of transactions with related parties is given in the Annual Report for 2014. There are no major changes in type of transactions between related parties during the quarter.

Note 8 Investments in associates and joint ventures

Entity Proportion of ownership

30 .09 .2015

Joint ventures

DOFCON Brasil Group 50 %

Associated companies

DOF Management AS 34 %

Marin IT AS 35 %

Master & Commander AS 20 %

30 .09 .2015

Booked value of investments in associates and joint ventures 31.12.2014 971

Share of net income of associates and joint ventures 59

Share of other comprehensive income related to associates and joint ventures -334

Dividend received from associates and joint ventures -3

Disposal of investments in associates and joint ventures -417

Booked value of investments in associates and joint ventures 30 .09 .2015 275

See also note 1 and note 2.

In October, Skandi Africa commenced on a 5 year time charter contract with Technip.


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Note 10 Shareholder information

Name No . shares Shareholding Voting shares

DOF Subsea Holding 2 AS 119 733 714 100 % 100 %

Note 11 General

This interim report has been prepared in accordance with the standard for interim reporting (IAS34). The accounting principles and calculation methods applied for the last annual accounts published have been applied to the quarterly financial report. Amendments and interpretations to the standards which are effective for the financial year beginning on 1 January 2015 are not material to the Group. The Financial Statement is unaudited.


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SUPPLEMENTAL INFORMATION

Condensed statement of comprehensive income 5 last quarters

3Q 2015 2Q 2015 1Q 2015 4Q 2014 3Q 2014

Operating income 1 991 1 962 1 656 2 025 1 904

Payroll expenses -510 -534 -539 -605 -501

Other operating expenses -920 -914 -660 -912 -851

Share of net income of associates and joint ventures -9 1 1 -6 -1

Profit from sale of non-current assets 1 42 205 262 -

Total operating expenses -1 438 -1 405 -993 -1 261 -1 353

Operating profit before depreciation (EBITDA) 553 557 663 764 552

Depreciation and write-downs -183 -202 -148 -172 -165

Operating profit (EBIT) 370 355 515 591 386

Financial income 9 9 8 10 9

Financial expenses -151 -149 -164 -177 -179

Realized gain / loss on financial instruments -23 87 -77 -60 24

Unrealized gain / loss on financial instruments -538 60 -162 -371 -119

Net financial income / loss -704 6 -395 -598 -265

Profit / loss before tax -333 361 121 -7 121

Tax expenses 21 -65 19 70 -30

Profit / loss for the period -312 296 139 63 91

The supplemental information below is presented according to internal management reporting, based on the proportionate consolidation method.


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Condensed statement of financial position 5 last quarters

Assets 3Q 2015 2Q 2015 1Q 2015 4Q 2014 3Q 2014

Intangible assets 988 834 887 788 638

Tangible assets 14 972 15 324 15 413 14 614 15 218

Financial assets 487 420 425 394 360

Non-current assets 16 447 16 578 16 726 15 796 16 215

Total receivables 2 080 1 949 2 305 2 035 1 940

Cash and cash equivalents 1 594 1 465 1 109 2 189 1 057

Current assets 3 674 3 414 3 414 4 223 2 998

Total assets 20 121 19 992 20 140 20 019 19 213

Equity and liabilities 3Q 2015 2Q2015 1Q 2015 4Q 2014 3Q 2014

Paid in equity 3 844 4 069 4 069 4 069 4 069

Other equity 1 535 2 081 1 743 1 778 1 645

Non-controlling interests 261 255 265 265 224

Total equity 5 641 6 405 6 077 6 112 5 938

Non-current provisions for commitment 29 23 24 22 13

Other non-current liabilities 9 959 8 986 9 900 9 380 9 655

Non-current liabilities 9 989 9 009 9 924 9 402 9 667

Short portion of debt to credit institutions 3 007 3 312 2 947 3 105 2 430

Other current liabilities 1 485 1 265 1 191 1 400 1 177

Current liabilities 4 492 4 577 4 139 4 505 3 607

Total liabilities 14 480 13 586 14 063 13 907 13 275

Total equity and liabilities 20 121 19 992 20 140 20 019 19 213

Key figures

3Q 2015 2Q 2015 1Q 2015 4Q 2014 3Q 2014

Profit per share (NOK) -2.6 2.5 1.2 0.5 0.8

EBITDA margin 28% 26% 28 % 25 % 29 %

EBIT margin 19% 16% 19 % 16 % 20 %

Return on net capital -6% 5% 2 % 1 % 2 %

Book value equity per share (NOK) 47.1 53.5 50.8 51.0 49.6

Value-adjusted equity per share (NOK) 69.24 70.3 73.6 75.1 75.2

Net interest-bearing debt (NOK million) 10 927 10 431 11 242 9 730 10 529


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DOF SUBSEA VESSELS

DOF Subsea currently owns one of the largest fleets of high-end construction vessels (including newbuilds) in the world. Offering a versatile, new generation of high power and purpose-built vessels with broad offshore capabilities.

Owned vessels

Skandi Protector

Skandi Acergy

Geograph Geoholm Geosea

Geosund

Skandi Carla Skandi Constructor

Skandi Achiever

Skandi Inspector

Skandi Neptune Skandi Niteroi

Skandi Hawk Skandi Hercules

Skandi Africa


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Skandi Skansen Skandi Patagonia

Skandi Vitoria

Skandi Salvador Skandi Santos

Skandi Seven

Skandi Singapore


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DOF SUBSEA VESSELS (CONTINUED)

DOF Subsea invests in the next generations of vessels. An ambitious New Build program utilises new technology and smart engineering to ensure efficient and environmental friendly operations in the future.

Newbuilds

Chartered vessels

DOF Subsea expanded the fleet with a number of Chartered vessels, building greater flexibility and a complementary fleet mix to meet our clients’ subsea challenges.

NB-824

EP-9 EP-10 NB-823

Chloe Candies

Normand Reach Polar King

Harvey Deep Sea Ross Candies

AUSTRALIA

DOF Subsea Australia Pty Ltd5th Floor, 181 St. Georges TcePerth, Wa 6000 AUSTRALIAPhone: +61 8 9278 8700Fax: +61 8 9278 [email protected]

DOF Management AustraliaLevel 1, 441 South RoadBentleigh, Vic. 3204AUSTRALIAPhone: +61 3 9556 5478Mobile: +61 418 430 939

BRAZIL

DOF Subsea Brasil Serviços LtdaMacae address:Rua A1, numero 35 Vale Encantado - Macaè - RJ BRAZILRio address:Rua Lauro Muller, 116 Salas 2802 a 2805,Torre do Rio Sul - Botafogo22290-160, Rio de Janeiro, R.J.,BRAZIL - CEP: 27910-000Phone: +55 22 2123-0100Fax: +55 22 [email protected]

CANADA

DOF Subsea Canada26 Allstone Street, Unit 2Mount Pearl, NewfoundlandCANADA, A1N 0A4Phone: +1 709 576 2033Fax: +1 709 576 [email protected]

SINGAPORE

DOF Subsea Asia Pacific Pte Ltd460 Alexandra Road# 15-02PSA Building, 119963SINGAPOREPhone: +65 6561 2780Fax: +65 6561 [email protected]

GLOBAL HQ

DOF Subsea ASThormøhlensgate 53 C5006 Bergen NORWAYPhone: +47 55 25 22 00Fax: +47 55 25 22 [email protected]

NORWAY

DOF Subsea Norway ASThormøhlensgate 53 C5006 Bergen NORWAYPhone: +47 55 25 22 00Fax: +47 55 25 22 [email protected]

SEMAR ASOksenøystein 121366 Lysaker NORWAYPhone: +47 67 12 40 06Fax: +47 67 12 40 06 [email protected]

DOF Management ASAlfabygget5392 StorebøNORWAY

Thormøhlensgate 53 C5006 Bergen NORWAYPhone: +47 56 18 10 00Fax: +47 56 18 10 [email protected]

ANGOLA

DOF Subsea AngolaBelas Business Park-Talatona Edificio Bengo, 1º AndarSala 106/107, LuandaRepublic of AngolaPhone: +244 222 43 28 58Fax: +244 222 44 40 68Mobile: +244 227 28 00 96 +244 277 28 00 [email protected]

DOF Management Pte Ltd460 Alexandra Road# 15-02PSA Building, 119963SINGAPOREPhone: +65 6868 1001Fax: +65 6561 2431

UNITED KINGDOM

DOF Subsea UK LtdExchange No.1, 62 Market St. Aberdeen AB11 5PJ, UNITED KINGDOMPhone: +44 1224 614 000Fax: +44 1224 614 [email protected]

DOF Subsea S&P UK LtdExchange No.1, 62 Market St. Aberdeen AB11 5PJ, UNITED KINGDOMPhone: +44 1224 614 000Fax: +44 1224 614 [email protected]

CSL EngineeringGeo House, Commerce StreetAberdeen AB11 5FN UNITED KINGDOMPhone: +44 1224 285 566Fax: +44 1224 285 [email protected]

DOF (UK) LtdGeo House, Commerce StreetAberdeen AB11 5FN UNITED KINGDOMPhone: +44 12 24 58 66 44Fax: +44 12 24 58 65 [email protected]

USA

DOF Subsea USA Inc5365 W. Sam Houston Parkway Suite 400, Houston, Texas 77041, USAPhone: +1 713 896 2500Fax: +1 713 984 [email protected]

DOF Subsea ASThormøhlens gate 53 C

5006 BergenNORWAY

www.dofsubsea.com

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DOF SUBSEA Sub/IR/2015/DOF Subsea Financial Repor… · FINANCIAL REPORT 3RD QUARTER 2015 NOK million 3Q 2015 3Q 2014 Change % Operating income 1 904 1 815 5% Operating expenses -1